Knowledge Economic City and its partners have signed a letter of intent to establish the SAR 7.5 billion Knowledge Gardens fund to develop a mixed-use project in Madinah.
The agreement was signed by Knowledge Economic City (KEC) and its subsidiary, Algharraa International Real Estate Development Company, alongside BSF Capital and Fourmen Investment Company. This closed-ended private real estate investment fund will be regulated by the Capital Market Authority (CMA).
Under the preliminary terms, BSF Capital will act as the proposed fund manager. Meanwhile, Fourmen Investment Company will participate as a shareholder and lead developer. KEC and Algharraa International will serve as shareholders and co-developers. This partnership aims to develop one of the largest mixed-use projects within the KEC masterplan.
Financial Structure of the Agreement
The financial structure of the fund is anchored by an in-kind land contribution valued at approximately SAR 1.66 billion. In addition, the fund will use direct cash contributions, bank financing, and contributions from other investors. The total deployment is estimated at SAR 7.5 billion, which covers land value, construction, indirect costs, reserves, and developer fees.
Preliminary studies estimate the total projected revenues of the project at approximately SAR 10.2 billion. Consequently, KEC and its subsidiary expect to receive about SAR 800 million in cash. This cash represents a portion of the contributed land value, while they will retain a 39.9% equity stake in the fund.
Specifications of the Knowledge Gardens Fund
The Knowledge Gardens fund will support a development located in the Southeastern District of Madinah. Specifically, the site lies west of Prince Naif Road and south of Sheikh Ibn Baz Street, near the Haramain High-Speed Rail station. This location connects the project directly to key transport links, boosting the local economy.
The project will occupy a net land area of 332,054 square meters across four development zones. Furthermore, the total gross floor area is estimated at 897,542 square meters. The total built-up area, including parking facilities, will reach approximately 1,274,419 square meters.
Project Components and Facilities
The planned development will feature approximately 4,198 residential units and 183 serviced apartments. Additionally, it will include a 450-room hotel to accommodate visitors and support local tourism. The commercial sector will receive 80,000 square meters of office and retail space.
Community facilities will include a community center, a mosque, a kindergarten, and a park network. Notably, the green spaces and parks will extend over more than 52,000 square meters. These facilities are designed to serve residents, businesses, and visitors in Madinah.
Strategic Objectives and Timeline
Dr. Moath Al-Yahya, CEO of Knowledge Economic City, stated:
“The letter of intent reflects our strategy of developing assets in partnership with first-rate financial institutions and developers, and paves the way for the launch of one of our largest and most integrated projects.”
Dr. Moath Al-Yahya, CEO of Knowledge Economic City
The letter of intent remains valid for 120 days from the date of signing. During this period, the parties will complete negotiations and finalize definitive agreements. The fund is projected to have a four-year term, consisting of three years for development and one year for marketing and exit.
